How the stock market work?

 WHAT IS STOCK?

• Companies need money to help them grow
• They use it for all kinds of things, like buying materials to make their products, developing new products, building plants and hiring people to work
•  To raise money, companies often split ownership of the companies into smaller "shares" that they sell to the public. The shares are also called 'stocks.

HOW IT WORKS?

• A Stock Exchange is an institution which hosts a market where traders can buy and sell stocks.

• Traders make money by buying the stock before the price goes up, and then they sell it before it goes back down.

• The price of the stock reflects the available information about the financial health of the company.

• Traders watch the stock rise and fall and make decisions to make a profit.

HOW TRADERS MAKE MONEY?

• If you sold your stock on a day when the price of that stock is higher than the price you paid for it, you would make money

HOW TRADERS LOSE MONEY?

If you sold your stock on a day when the price of that stock falls below the price you paid for it, you would lose money.